"People are not going to want to do without their cell phones, their high-speed wireless," said Smith. (See his stock recommendations, below.)

Tussle Over Telecom

Market watchers weigh in on what to be wary of, with Jack Ablin, Harris Private Bank and Charlie Smith, Fort Pitt Capital Group

Jack Ablin, CIO of Harris Private Bank, disagrees: "We look at telecom from the top down. We're seeing continued P/E contraction, and in terms of momentum, continued breakdown."

Ablin noted a holistic problem rippling through the sector: "Telecoms' biggest customers are the U.S.' biggest banks and brokers." And Ablin said he doesn't foresee those big contracts being re-upped or expanded any time soon. (Dick Bove is more optimistic about banks.)

Smith's Recommendations:

"Cash flows for Comcast, Verizon and AT&T are going to hold up pretty well," Smith said. He pointed out that Verizon raised its dividend recently, and praises the firm's rollout of its FiOS ultra-high-speed fiber-optic Internet/TV/telephone service.